Are The “Magnificent 7” Companies Top Contributors to Earnings Growth for the S&P 500 for Q3?

A number of the companies in the “Magnificent 7” have been the top contributors to year-over-year earnings growth for the S&P 500 in recent quarters. Are companies in the “Magnificent 7” also expected to drive earnings higher for the S&P 500 for the third quarter?

Overall, four of the companies in the “Magnificent 7” are projected to be among the top 10 contributors to year-over-year earnings growth for the S&P 500 for Q3 2024: NVIDIA, Alphabet, Amazon.com, and Meta Platforms.

However, NVIDIA and Alphabet are the only “Magnificent 7” companies expected to be among the top five contributors to year-over-year earnings growth for the S&P 500 for the third quarter. NVIDIA is expected to be the largest contributor to earnings growth for the S&P 500 for the third quarter. After NVIDIA, Pfizer, Moderna, and Micron Technology are the top contributors to year-over-year earnings growth. All three companies are benefitting from easier comparisons to losses reported in the year-ago quarter. Alphabet is projected to be the fifth-largest contributor to earnings growth.

In aggregate, the “Magnificent 7” companies are expected to report year-over-year earnings growth of 18.1% for the third quarter. Excluding these seven companies, the blended (combines actual and estimated results) earnings growth rate for the remaining 493 companies in the S&P 500 would be 0.1% for Q3 2024. Overall, the blended earnings growth rate for the entire S&P 500 for Q3 2024 is 3.4%.

Analysts predict the companies in the “Magnificent 7” in aggregate will report double-digit earnings growth over the next five quarters as well. However, it is interesting to note that analysts believe the other 493 companies in the index will also report double-digit (year-over-year) earnings growth over the next five quarters. As a result, the S&P 500 overall is also expected to report double-digit earnings growth rates of 14.0%, 13.8%, 13.0%, 17.1%, and 15.4% for Q4 2024, Q1 2025, Q2 2025, Q3 2025, and Q4 2025, respectively.

* Companies are not in order of contribution

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